Farmland vs. traditional real estate: Which is a more resilient investment hedge?

The devastating wildfires that raged in Southern California in early 2025 have been a true tragedy, and our thoughts and prayers go out to those affected.

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For someone like me who works closely with landowners and those investing in real property, these events were a stark reminder of the vulnerability of traditional real estate investments.

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While the fires raged, I spoke with a landowner considering adding another parcel of north central Iowa farmland to their portfolio. Our discussion got me thinking about why farmland offers a uniquely resilient investment, especially in times like these, when the stability of tangible assets feels increasingly valuable.

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Unlike buildings, farmland can stay productive after weather events

When considering real estate investments, many worry about the risks associated with natural disasters. 

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Residential homes, commercial properties and even data centers are susceptible to devastating loss from natural disasters like wildfires, floods and storms. 

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But unlike traditional real estate, farmland has a unique ability to recover and remain productive after severe weather events.

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Even when farmland is impacted by acts of nature like tornadoes or derechos, the typical worst-case scenario is the loss of one year's crop. The land remains, ready to produce again the following season.

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Farmland also has a built-in safety net

Since the 1930s, the federal government has been involved in supporting U.S. agriculture. The passage of the Federal Crop Insurance Act in 1980 marked the beginning of the regulatory and subsidy framework we see today. 

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Today, crop insurance supports revenue — both yield and price — by providing an annually adjusted financial floor. That safety net ultimately reinforces farmland’s long-term value as an investment. 

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One way this safety net shows up: Annual cash rents on farmland typically yield 2.5% to 3%. That return may seem modest at first glance. But unlike other forms of real estate, farmland benefits from this built-in cushion, which helps farm operators weather tougher seasons and continue making rent payments. 

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Why would we expect this support to continue? Among many reasons, it helps support the nation's food supply, which is fundamental to any prosperous society.

Or as former Congressman John Salazar puts it, “There is only one thing that can bring our nation down — our dependence on foreign countries for food and energy. Agriculture is the backbone of our economy.”

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Farmland’s intrinsic value

Owning farmland means not only owning real estate that can “survive” disasters but also owning a medium to grow crops and harness natural resources. North central Iowa farmland provides access to:

• 3,000 growing degree units (GDUs) of sun power. GDUs measure how much usable heat your crops are getting.
• 20 to 25 inches of rainfall during the average April-through-September growing season.
• A natural sponge that retains water, nutrients, and beneficial microorganisms.

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Essentially, owning farmland equates to possessing sunshine, water and a foundational medium — the building blocks of life on Earth.

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For investors, this intrinsic value translates into real returns as crop yields and output characteristics improve and the land continues to appreciate. For landowners, particularly those managing inherited or long-held properties, knowing that the land remains a productive asset even in volatile markets can bring peace of mind. 

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If you’re considering purchasing farmland or evaluating your property’s potential and want to talk through your options, don’t hesitate to reach out to set up a discovery call.

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Reid Weiland is the managing partner of Weiland Farms. He oversees the farm’s day-to-day operations and leads all land management and farmland acquisition efforts.

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‍Disclaimer: This article is for general informational purposes only and does not constitute investment, financial or tax advice. You should consult with a licensed professional for advice concerning your specific situation.